Powell Up Next

Traders today are bracing for a fresh set of commentary from Fed chairman Powell. The central bank leader makes his semi-annual testimony at the Senate Baking Committee today and markets are eagerly awaiting any potential insight into how the Fed is likely to act on rates next month. Along wit the pause in tightening which was announced in June, the Fed also signalled that further rate hikes might still be necessary. However, given the steady drop in inflation in the US, there is a growing view that the current pause will likely extend.

Near-Term Market Risks

Looking at markets today, US stocks in particular will be closely watched around the Fed speech. If Powell is seen reaffirming the view that rates can remain on hold for now, this should see stocks rallying near-term as the US Dollar continues to weaken. However, any hawkishness from Powell today, perhaps on the back of better employment and retail sales data last week, will likely act as a headwind to stocks near-term.

Technical Views

Nasdaq

The rally in the Nasdaq has seen the index stalling into a test of the 15177.5 level for now. Price remains above the bull channel top, however, and so the bullish outlook remains for now, in favour of a breakout to fresh YTD highs. Should price correct from here, however, focus will be on the 14288.2 level as the next key support to note.